Technical traders usually are net losers at trading and often mistake mostly random price movements for all type of price patterns that they think have forecasting value, as if it raining 3 of the last 4 days will give them a better idea of what the weather will do this weekend, that type of thing.

Best guestimate type trading IMO.

Quants are usually really good at math and they use those skills to build models that usually will make money by taking advantage of some statistical edge they have found. Most quants are involved with some type of derivatives type trading and most quants over time are probably taking the money out of the pockets of the technical traders. That is as a "group" the quants win more than they lose, and as a group the technical traders lose more than they win, so well, wealth is transfered from one group to the other.

Most posters here on ET (myself included) seem to be closer to being technical traders than quants.

Technical traders usually are net losers at trading and often mistake mostly random price movements for all type of price patterns that they think have forecasting value, as if it raining 3 of the last 4 days will give them a better idea of what the weather will do this weekend, that type of thing.

Best guestimate type trading IMO.

Quants are usually really good at math and they use those skills to build models that usually will make money by taking advantage of some statistical edge they have found. Most quants are involved with some type of derivatives type trading and most quants over time are probably taking the money out of the pockets of the technical traders. That is as a "group" the quants win more than they lose, and as a group the technical traders lose more than they win, so well, wealth is transfered from one group to the other.

Most posters here on ET (myself included) seem to be closer to being technical traders than quants.

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Interesting comments, except that math has never been shown to be a reliable predictor of human behavior. Math is a pure science. Human behavior is anything but. As for statistics, it is far better at explaining the past than it is at forecasting the future. Ask your favorite economist. Incidentally, economists use some of the most sophisticated math. Know any rich ones? I think that most of the the quants who make money do so either for a short period of time or because someone is paying them a salary.

On the other hand, I think that much of what passes for "technical analysis" is sheer whimsy. Much, but not all.

But the really good quants, like Hull and Hanley and other privately held firms that you never hear about unless you are in the industry, make huge amounts of money year after year. The statistical techniques are not unlike those that insurance companies use, and are actuarially driven. They require tremendous resources to execute, but have proven to work year after year, some taking many millions out of the markets for decades now.
Jessie

But the really good quants, like Hull and Hanley and other privately held firms that you never hear about unless you are in the industry, make huge amounts of money year after year. The statistical techniques are not unlike those that insurance companies use, and are actuarially driven. They require tremendous resources to execute, but have proven to work year after year, some taking many millions out of the markets for decades now.
Jessie

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I would be very interested to know what kind of ROE or ROI actuarially-generated trading methods can generate. If you know, please advise.